Declining exports and poor sales at home are hurting South Korea’s three foreign-owned carmakers Renault Samsung, GM Korea and Ssangyong.
Their combined exports between January and September fell 9% year on year because of the global economic slowdown and a lack of new products. They are also being hit in their domestic market as imported cars increase their market share.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Korea’s ‘big two’, Hyundai and Kia, have a combined domestic market share of 70% leaving Renault Samsung, GM Korea and Ssangyong to fight the importers for the remaining 30%.
Renault Samsung’s domestic sales fell 49% and the company has cut back production at its plant in Busan several times since the spring and has no plans to introduce any new models in the near future.
It is also paring back its workforce call for voluntary retirement from 4,500 employees in all divisions except a part of research and development. Around 800 people have already applied.
Ssangyong, owned by India’s Mahindra & Mahindra, has seen exports decline 7% decline on the year although its new SUVs have helped it to a slight increase in Korea.
GM Korea saw its January-September exports fall 4%, a decline attributed to worse than expected sales of the Malibu midsize sedan, which went into production last November.
While South Korea’s domestic vehicle sales, including buses and trucks, fell 8% on the year to 1,019,806 units through September, the country’s imports grew 20% in the same period, with 95,706 cars entering the country.
German vehicles accounted for 65% of the imported cars in the first nine months, followed by Japanese with 18%. Leading the way are BMW, Mercedes-Benz, Volkswagen and Audi while Toyota and Lexus are the top Japanese brands.
